London continues to buck the national trend of falling or flat house prices as demand from overseas buyers continues to push up the cost of homes in the capital, surveyors reported today.

The Royal Institution
of Chartered Surveyors said today that housing market activity is gathering pace as would-be buyers look to grab a winter deal amid an improved mood of confidence.

But despite an expected pick-up in sales
in the coming months, prices are likely to remain flat, according to the RICS's housing market survey for November.

A balance of 9% more surveyors reported
price falls rather than rises on a monthly basis, which is slightly up on
October but suggests that the market is fairly stable, RICS said.

Continuing a long-running trend, London,
which has seen strong demand from overseas buyers, was the only area to see
prices increase, with 40% of surveyors reporting rises rather than falls.

Northern Ireland and Wales saw the worst
price drops, with net balances of 49% and 36% of surveyors reporting falls
rather than rises respectively.

Inquiries from potential buyers have been
steadily growing across the country since the end of the summer, with a balance
of 11% more surveyors reporting increased levels of interest rather than falls.

RICS said that although demand from
would-be buyers is still at low levels by historic standards, people who are in
a position to buy a house are gradually coming forward to test the market.

A net balance of 14% of surveyors expect
house sales to increase rather than decrease in the next three months, although
prices are expected to remain "flatter by way of contrast" RICS said.

Peter Bolton King, RICS global residential
director, said: "There is certainly some optimism creeping back into the
housing market, and it is encouraging to see an increase in potential buyers
across parts of the country where the market has particularly suffered in
recent years.

"That said, there is still a long way
to go and the long-standing barriers to home ownership are still very much a
problem for the likes of first-time buyers."

The signs of increased market activity
chime with recent figures released by the Bank of England which showed that
mortgage approvals for house purchase reached their highest number since the
start of the year in October.

A multi-billion pound Government Funding
for Lending scheme to boost the flow of cash to households and firms was
launched at the start of August, which has sparked a mortgage price war among
lenders, although much of this has been aimed at borrowers with bigger
deposits.

The number of mortgages on the market has
increased by around a fifth since the scheme started, comparison website
MoneySupermarket recently found.

Halifax also said last week that it
expects house prices to remain flat throughout 2013 amid the tough economy,
with first-time buyers still struggling to get on the property ladder and the
market in London and the South East continuing to outperform the rest of the
country.

Mr Bolton King continued: "The
Funding for Lending scheme is beginning to bear fruit for potential buyers.

"However, the macro economic picture
continues to weigh heavy on the market and continues to to prevent any really
significant boost in activity."